Indonesia PMI March 2016

Indonesia: Manufacturing PMI signals expansion in March

April 1, 2016

The manufacturing Purchasing Managers’ Index (PMI) rose from 48.7 in February to 50.6 in March, according to a release provided by Nikkei and Markit. As a result, the index now lies above the 50-threshold, which indicates expansion in the manufacturing sector. March’s reading marked the best result since September 2014.

March’s upturn came on the back of a renewed growth in production amid rising new orders. Domestic demand appeared strong, driving new orders; growth, while export orders fell in March. Employment was relatively unchanged, while input prices rose mildly. Markit commented that, “with the sector having finally moved into expansion territory, firms will be looking for signs of a convincing recovery taking hold before hiring additional workers. If cost inflation continues to ease, Indonesian manufacturers may look to gain a competitive edge through cutting output prices.”

FocusEconomics Consensus Forecast panelists see manufacturing rising 4.7% in 2016, which is down 0.2 percentage points from the previous month’s estimate. For 2017, the panel expects manufacturing to increase 5.1%.